Oil settles near $80 a barrel

Published 7:00 pm, Thursday, March 18, 2010

NEW YORK (AP) — Oil prices slumped at the end of the week, tumbling Friday close to $80 a barrel as continued uncertainty about Greece's economy helped lift the dollar higher.

Benchmark crude for April delivery dropped $1.52 to settle at $80.68 a barrel on the New York Mercantile Exchange.

Oil is traded in U.S. currency, and its price tends to fall as the dollar rises and makes contracts tougher to buy with foreign currency. Investors also will move money out of commodities and into the greenback as the dollar rises.

Crude prices rallied earlier this week after the Fed promised to hold interest rates at record lows in a move that was expected to help the economic recovery. Prices crested Wednesday, and they've been falling since then as worries about Greece's debts forced the euro lower.

Greece, which has struggled to manage its budget, has been looking for help from its European neighbors. But Germany is reluctant to give financial aid, and Greece said this week it may be forced to turn to the International Monetary Fund.

The uncertainty about the country's finances helped push the euro lower by 0.7 percent to $1.3513 on Friday. The U.S. Dollar Index, which tracks the dollar versus other major currencies, also rose 0.6 percent in morning trading.

At the pump, retail gasoline prices increased overnight to a national average of $2.811 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 20.3 cents more expensive than it was a month ago, and it's 87.8 cents higher than last year.

In other Nymex trading in April contracts, heating oil fell 4.24 cents to settle at $2.0767 a gallon, and gasoline dropped 4.53 cents to settle at $2.2556 a gallon. Natural gas rose 8.4 cents to settle at $4.169 per 1,000 cubic feet.

In London, Brent crude fell $1.60 to settle at $79.88 a barrel on the ICE futures exchange.